Ryanair, Europe’s largest airline today (27 Sept) confirmed it will slow its growth this winter (Nov 17 to Mar 18), by flying 25 less aircraft (of its 400 fleet) from November, and 10 fewer aircraft (of 445) from April 2018. By reducing its flying schedule in this controlled manner Ryanair will:
- eliminate all risk of further flight cancellations, because slower growth creates lots of spare aircraft and crews across Ryanair’s 86 bases this winter.
- roster all of the extra pilot leave necessary in Oct, Nov and Dec to meet the IAA’s requirement to complete a 9 month annual leave transition period (April to Dec ‘17) so that Ryanair starts a new calendar leave year from 1st Jan 2018 with no backlog.
- roster almost 40% of the annual pilot leave requirement for 2018 in Q1 2018, which removes risk of roster problems recurring next year.
- roll out a series of low fare seat sales for winter 2017 confident that there will be no further roster related cancellations.
Slower growth this winter will have positive but differing impacts on Ryanair’s stakeholder groups as follows:
For Ryanair Customers
- Flying 25 fewer aircraft this winter will result in a number of flight and schedule changes from Nov to Mar 2018. We have less than 400,000 customers booked on these flights, (which affects less than 1 flight per day across our 200 airports over the 5 month winter period), and many of these flights have zero bookings at this time. Less than 1% of the 50m customers Ryanair will carry this winter are affected and every one of these customers has received an email today giving them between 5 weeks to 5 months notice of these schedule changes, offering them alternative flights or full refunds of their airfare. They have also received a €40 (€80 return) travel voucher which will allow them to book – during October – a flight on any Ryanair service between October and March 2018.
- We have also emailed each of the 315,000 customers whose flights were previously cancelled over a 6 week period in Sept and Oct. (Ryanair carries 15m customers every 6 weeks) We have offered each of these customers a €40 travel voucher (€80 return), again for travel between October and March 2018. This flight voucher is in addition to the flight re-accommodation/refunds they received last week, and applicable to the EU261 compensation which they may claim and receive over the coming weeks. (Note: €40 per seat exceeds Ryanair current ave. fare).
- For the other 99% of Ryanair customers who are unaffected by these flight cancellations and schedule changes, this slower rate of growth means that from today there is no risk of further roster related flight cancellations. These measures have already restored Ryanair’s industry leading reliability and punctuality. Customers will also enjoy lower airfares, as Ryanair responds to last week’s rostering failure, by rolling out seat sales over the coming days and weeks. This starts this weekend with a 1 million, €9.99 one way, seat sale for travel in Oct, Nov and Dec.
For Ryanair’s Pilots
- We appreciate the widespread support we have received from our 4,200 pilots over the past weeks. Hundreds of pilots, and many of their ERC’s have been in regular contact with the airline offering to work days off, to work one week of their allocated month of leave, and offering to go public to correct the false claims made about them, and Ryanair, by competitor airline pilots in certain media outlets. We appreciate their professionalism which has meant that since last Monday (18th Sept.) Ryanair has operated over 16,000 daily flights with only 3 cancellations, and over 96% of all first wave flights departing on time.
- This slower growth will provide stability to pilot rosters from November to March. We will not need pilots to give up one week of their well-earned annual leave from Nov. onwards. Slower growth creates a large surplus of standby pilots so we can allocate all annual leave due in the 3 months to December, and more again in Q1 of 2018.
- We have communicated these changes by email to Ryanair pilots today. We have assured them that all their annual leave is protected. This now eliminates the roster problems this winter, because slower growth means we no longer require our pilots to reorganise their annual leave. We are implementing a €10,000Capts/€5,000F.O. base supplements at Dublin, Stansted, Berlin and Frankfurt from 1st October as we agreed these pay increases with the 4 base ERC’s at recent meetings. We received requests from a number of other ERC’s who wish to discuss these issues, and we have agreed to schedule meetings with these ERC’s over the coming months.
- We will not respond or accede to anonymous demands made via unsigned emails for group or regional meetings, or for union interference at these internal ERC meetings. Many of our pilots and ERC’s have confirmed that these unsigned letters were drafted by pilots/unions of competitor airlines who wish to pursue an industrial relations agenda at the expense of Ryanair and its pilots.
- We have also written to our pilots to correct last week’s false claims made about our pilot recruitment. In the current year under 100 Captains have left (mainly to retirement or long haul airlines) and less than 160 F.O’s (mostly to long haul airlines). Over the next 8 months Ryanair has recruited and will train over 650 pilots not only to replace these leavers/retirees but also to crew up for the 50 new Boeing aircraft we will buy to May 2018 to bring our fleet to 445 for S18. Contrary to false claims of pilot shortages, Ryanair has in recent weeks seen a big surge in pilot applications from Gulf carriers and in Germany and Italy where both Air Berlin and Alitalia are in bankruptcy and hundreds of their pilots are facing job losses or steep cuts in their pay and conditions.
For our Shareholders
- This slower rate of growth will slightly reduce our traffic this year and next. Our monthly growth from Nov 17 to March 18 will slow from 9% to 4%. Our full year traffic of 131m will now moderate to 129m, which is 7.5% up on last year. By slowing our summer 2018 fleet growth from 445 to 435 aircraft, we expect traffic to March 2019 will slow from 142m to 138m, a 7% rate of growth.
- The total cost of the flight cancellations last week should be under €25m. We expect the cost of the free flight vouchers issued today to affected customers will be less than €25m. We expect slightly lower yields over the next two months as we promote seat sales. We do not expect these initiatives to alter our current year guidance of between €1.40bn to €1.45bn PAT. We will provide a full update on these issues to shareholders during the half year results in late October.
For our People
We have rearranged our pilot recruitment and rostering function and will invest in more rostering resources to ensure this failure cannot recur. The 13,000 highly skilled aviation professionals in Ryanair continue to deliver Europe’s lowest air fares to a growing and loyal customer base of 129m passengers p.a. This, over 30 year record of exceptional delivery, will continue but only if we learn from this mistake and work hard to ensure it never happens again. In order to focus on repairing this rostering problem this winter, Ryanair will eliminate all management distractions starting with its interest in Alitalia. We have notified the Alitalia bankruptcy Commissioners that we will not be pursuing our interest in Alitalia or submitting any further offers for the airline.
Ryanair’s Michael O’Leary said:
“We sincerely apologise to those customers who have been affected by last week’s flight cancellations, or these sensible schedule changes announced today. While over 99% of our 129m customers will not have been affected by any cancellations or disruptions, we deeply regret any doubt we caused existing customers last week about Ryanair’s reliability, or the risk of further cancellations.
From today, there will be no more rostering related flight cancellations this winter or in summer 2018. Slower growth this winter, will create lots of spare aircraft and crews which will allow us to manage the exceptional volumes of annual leave we committed to delivering in the 9 months to Dec 2017. We will start a new 12 month leave period on the 1st of Jan 2018 in full compliance with EU regulations and the IAA’s requirements.
All of the passengers who have been affected by these disruptions have now been offered re-accommodation or full refunds and their applicable EU261 entitlements. In addition today, they are receiving a travel voucher (€40 one way/€80 return) which they may use to book any Ryanair flight of their choice during October for travel between October and March 2018. We look forward to welcoming them all on board.”